NEW YORK: Prices of US Treasuries were little changed, with yields on longer-dated issues rising slightly, on Wednesday afternoon after Federal Reserve Chair Janet Yellen said she is "looking forward" to a U.S. interest rate hike.
Yellen's remarks seemed to suggest the Fed is inclined to raise rates at the Fed's final meeting of the year on Dec. 15-16.
Movement in the Treasuries market following her remarks was modest. Yields on longer-dated issues rose, but traders expect the long-term impact to be muted.
Of late the yield curve has been flattening, with short-dated yields rising more quickly than long ones. The move is based on the view that after the U.S. central bank ends its near-zero rate policy, shorter-term Treasury yields, which respond more to the Fed, will rise faster than long yields, which respond more to inflation expectations.
"I don't think Treasuries prices will erode much further from here. We've pretty much priced in a 25 basis point increase," said Kim Rupert, managing director of global fixed income analysis at Action Economics in San Francisco.
U.S. 2-year Treasury notes were last down 3/32 in price to yield 0.95 percent.
U.S. benchmark 10-year Treasury notes were last down 11/32 in price to yield 2.197, up from 2.183 percent earlier on the day.
The U.S. 30-year bond fell 11/32 in price to yield 2.936 percent, up from 2.924 percent earlier on the day.
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